Best & Less share price surges 7% on sharp FY22 results

The Best & Less Group Holdings Ltd (ASX: BST) share price is well in the green this morning following the release of the company’s FY22 results.

At the time of writing, the clothing retailer’s shares are trading 4.96% higher at $2.75 apiece after hitting a high of $2.81 a share shortly after market open.

Let’s check the company’s results.

Best & Lest shares lift as online sales grow

Key takeouts from the company’s earnings include:

• Revenue of $622 million, down 6.2% from $663 million
• Like-for-like (LFL) sales, also known as same-store sales, were down by 0.7% year on year, but up 9.1% versus FY20
• Online sales growth of 15.6% versus this time last year to $69.7 million
• Gross profit margin of 49.1%, stemming an EBITDA margin of 10%
• Pro forma EBITDA of $62.5 million compared to $71.6 million in FY21
• Net cash position of $36 million
• Final dividend of 12 cents per share declare, fully franked dividend yield of 8.8% based on 29 August closing price
• Total dividend of 23 cents per share for FY22

What else happened this period for Best & Less?

Despite numerous challenges affecting supply chains and overall product supply, notwithstanding COVID-19 headwinds, the company grew its gross margin 20 basis points year on year.

Online sales were the standout with around a 16% year-on-year gain that also contributed around 11% of total sales, up from 9.2% the year prior.

Growth also benefited from a strong performance from the company’s core non-discretionary product lines. These continue to drive significant volume for the business, Best & Less said.

Meanwhile, a 12 cents per share dividend was declared on a roughly 80% payout ratio. This brings the total dividend to 23 cents per share for FY22.

Management commentary

Speaking on the results, Best & Less chief executive officer Rodney Orrock said:

After losing over 21% of total trading days in the first half due to COVID-related store closures, I am pleased to report a strong second half performance. Our team kept their eyes on the ball, doing a great job to control the things that could be controlled, delivering significantly higher sales and strong margins, while continuing to provide superb service to our customers.

What’s next for Best & Less?

The company has started FY23 well. It said:

Through eight weeks of trading in H1 FY23, total sales were +38.0% on the [prior corresponding period] PCP. LFL sales were +1.4% overall, with store LFL sales +7.5% and online sales -29.1%, noting that sales in the PCP were impacted by lockdowns and trading restrictions in several states.

Best & Less share price snapshot

The Best & Less share price is down almost 33% this year to date but only 2.5% lower than this time last year.

The company’s share price has climbed 17% in just the last month.

Best & Less has a current market capitalisation of around $346 million.

The post Best & Less share price surges 7% on sharp FY22 results appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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